Overview
FAR 6.202 authorizes federal agencies to exclude a specific source from a contract competition to foster long-term competition, protect the industrial base, or ensure the continuous availability of critical supplies and services.
Key Rules
- Permissible Reasons for Exclusion: An agency head may exclude a source if it reduces overall costs through increased competition, supports national defense (industrial mobilization or R&D capability), ensures reliable supply chains, or meets critical medical and safety needs.
- Determination and Findings (D&F): Every exclusion must be supported by a formal D&F signed by the agency head or their designee.
- No Class Exclusions: Determinations must be made on a case-by-case basis for specific contract actions; the FAR prohibits making these determinations on a class basis.
- Cost Justification: If the exclusion is based on reducing overall costs, the findings must include specific estimated savings and a description of the methodology used to derive those estimates.
- Documentation Responsibility: Technical and requirements personnel are specifically tasked with providing the data and evidence necessary to support the exclusion recommendation.
Practical Implications
- This authority serves as a strategic tool for "industrial base grooming," allowing the government to prevent a single contractor from monopolizing a market or to ensure a backup manufacturer remains viable for national security.
- Because excluding a source is a significant deviation from full and open competition, agencies must build a rigorous administrative record to defend against potential bid protests from the excluded incumbent or dominant provider.